Mumbai Indian vegetable oilseed futures were trading higher Thursday amid short covering of yesterdays losses supported by the huge overnight gains in the US soy complex. The deficient rainfall in many parts of the country and increase in demand in the cash markets are also supporting the gains.

The Malaysian palm oil futures has ended the morning session marginally down on weak demand, after trading higher initially for most of the session. The US soy complex closed sharply higher overnight, on technical buying and long-range weather concerns. However, mixed trading is being seen currently with August soy oil and August soybean quoting by [-] 9 points and [+] 5.75 cents on e-CBOT.

Though, crude oil tumbled overnight for the second successive session, it was ignored by US soy markets. August crude oil at the New York Mercantile Exchange, settled down overnight by $4.14 at $134.60 a barrel.

The Indian markets are trading higher on short-covering of yesterdays losses, supported by the strong overnight recovery in the US soy markets. The good demand amid supply tightness in the cash markets ahead of the upcoming festival season is also supporting the gains.

Though, it has been largely factored into the prices, the deficient rainfall and lack-lustre sowing of oilseeds in parts of Maharashtra, Karnataka and Andhra Pradesh are still weighing on the market sentiments. At the same time, the overall sowing picture of soybean, continues to be bright on account of the normal rains in Madhya Pradesh. The sowing of soybean in Madhya Pradesh is expected to be largely completed by this week. A clearer picture regarding sowing is expected in tomorrows Weather Watch Report from the Ministry of Agriculture.

Idea that the steep fall seen yesterday over reports of a prospective ban on oilmeal exports went too far, is leading to fresh buying and short-covering of positions currently. Major sections of traders are confident that Government would not take such a decision that would harm the Indian soy industry, considering the limited domestic demand for soymeal, its stabilizing effect on soybean prices and huge tax revenue earned from soymeal exports.

The August soybean contract at National Commodity Derivatives Exchange [NCDEX] at 10.30 hours is trading higher at Rs. 2,728.00 [+ 30.50] per 100 kg with 19,980 tonnes traded. The August contract at National Board of Trade [NBOT] is up at Rs. 2,729.00 [+ 31.50] per 100 kg.

August CPO at Multi Commodity Exchange of India is marginally up at Rs. 506.80 [+ 0.30] per 10 kg with 660 tonnes traded.

Crude Palm Oil [CPO] at the Bursa Malaysia Derivatives [BMD] ended the morning session down, after trading positively for most of the session. While, huge overnight gains in US soy oil led to initial gains, the reduction of gains in soy oil in after-hours trading, overnight losses in crude oil and lackluster demand in the cash market forced the market to move down towards closing.

The benchmark October contract ended the session down at MYR 3,455.00 [- 11.00] a tonne with 4,485 lots traded. [MYR=Malaysian Ringitt][1 lot=25 tonnes]

The US soy complex closed sharply higher on Wednesday, bouncing back from previous two sessions losses on technical buying, short covering and concerns for long range weather outlooks. Forecasts for a hot and dry climate raised concerns for plants in the growth phase.

August soybeans settled 31 cents higher at $15.73 and November soybeans ended 32 cents higher at $15.48. December soymeal settled $8.40 lower at $409.70 per short ton. December soy oil finished 110 points higher at 65.54 cents per pound.

MUSTARD SEED

Mustard seed futures is trading positively on short-covering of yesterdays losses tracking the recovery in domestic soybean and overnight strong gains in US soy markets. The strong underlying demand, the absence of rains and delay in sowing of oilseeds in select regions of Maharashtra, Andhra Pradesh and Karnataka are also supporting the gains. However, the weakness crude oil and losses in Malaysian palm oil are weighing on the market sentiments limiting the gains.

Most active mustard seed September futures on NCDEX is trading higher at Rs. 681.75 [+ 4.55] per 20 kg with 13,940 tonnes traded.

The regional markets are mixed with August contract at Sirsa and Hapur quoting at Rs. 570.80 [- 0.20] and Rs.629.70 [+ 0.30] per 100 kg.

CASTOR SEED

Castor seed futures is trading positively supported by good buying of castor oil by exporters, reports of enquiries for purchase from overseas countries and the lack of rains in the major castor seed bowls.

The time of sowing of castor seed in Andhra Pradesh is already over, with only negligible sowing being reported. The sowing of castor seed in Gujarat would commence from August. The poor rains in north-Gujarat have led to limited sowing of other crops and experts are expecting increase in castor seed acreage in this region if rains improve in August. This can lead to good supply from January, though the supply would be tight in November December, when normally supplies from Andhra Pradesh are available.

Castor seed August contract at NCDEX is trading higher at